What is profit sharing?
A. A gainsharing program in which employees receive a bonus if the ratio of labor costs to the sales value of production is below a set standard.
B. An incentive pay in which payments are a percentage of the organization's profits and do not become part of the employees' base salary.
C. A group incentive program that measures improvements in productivity and effectiveness and distributes a portion of profit to employees.
D. A combination of performance measures directed toward the company's profit and used as the basis for awarding incentive pay.
E. An incentive plan where a percentage of the previous year's profits is provided to employees as a part of salary.
Answer: B. An incentive pay in which payments are a percentage of the organization's profits and do not become part of the employees' base salary.
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